This comes on top of serious emerging problems with the US Dollar and the growing crisis in Latvia which could have serious consequences across Europe. The dramatic spike in the price of gold to hit new highs is a reflection of a profound sense of underlying crisis, despite the market rallies in stocks that are in anticipation of a resumption of global growth.

In fact the rally is actually part of the problem- there remains insufficient banking liquidity to fund the kind of asset inflation that the market is now pricing in. As UK house prices also return to their previous- unsustainable- levels, the stage is being set for a brutal market rout.

The quantitative easing intended to ease recession is instead undermining confidence in several currencies, especially the US Dollar. I think that there is now a very real risk that this autumn we will finally see a market capitulation that reflects the fundamental underlying problems in the US economy. The rise in the value of gold reflects the general view that the United States no longer has the economic capacity to maintain the Dollar as a reserve currency. While people have been expecting a gradual shift to a more multi-polar currency regime, the fact is that the instability in the markets is such that there is a real likelihood of a sudden, wrenching adjustment too.

The market is banking on a V-shaped recovery, the reality is that at best it will be U-shaped, and, in fact with so many potential nasties lurking in the global economic wood-shed, we could be on the brink of a double dip.

The risks are now very high and if not yet time to take to the hills, the fact is that the global crisis is entering a new and potentially far more unstable phase.